The Open Work Partnership & OMNIS Agility

Marvel.

Hi,

I would like to ask for some feedback please on your experiences and knowledge.

I have been speaking to a financial advisor from The Open Work Partnership. The conclusion was that he advises that I move my work pension worth hundreds of thousands of pounds to their managed pension 'drawdown' funds called "OMNIS Agility Portfolio 4 or 5".

His fee is 2% (my investment band) or hourly rate.

The pension will be moving from my work pension where my employer contributes. We'll be keeping 1% in the work pension to allow my employer to keep contributing. The work pension as I get older gets disinvested. Not so with Agility I'm told. I am in my 50s.

I was also told to stay away from annuities.

Just an open question on the organization, the funds, the advice and the fees - just your thoughts and experiences.

Thanks

Dazed_and_C0nfused

Marvel. said:

Hi,

I would like to ask for some feedback please on your experiences and knowledge.

I have been speaking to a financial advisor from The Open Work Partnership. The conclusion was that he advises that I move my work pension worth hundreds of thousands of pounds to their managed pension 'drawdown' funds called "OMNIS Agility Portfolio 4 or 5".

His fee is 2% (my investment band) or hourly rate.

The pension will be moving from my work pension where my employer contributes. We'll be keeping 1% in the work pension to allow my employer to keep contributing. The work pension as I get older gets disinvested. Not so Agility I'm told. I am in my 50s.

I was also told to stay away from annuities.

Just an open question on the organization, the funds, and the fees - just your thoughts.

Thanks

What has made you consult a financial advisor rather than an independent financial advisor 🤔.

Is moving from your existing pension provider something you were expecting to do?

Marvel.

He was recommended. He found us a mortgage.

I had no previous plans with my pension, it was just sitting there building slowly. He suggested I moved my pension instead of a buy-to-let project I had. Properties taking up more time and lower returns.

I'm not that experienced with the different types of advisers.

Marcon

Marvel. said:

The pension will be moving from my work pension where my employer contributes. We'll be keeping 1% in the work pension to allow my employer to keep contributing. The work pension as I get older gets disinvested. 

I was also told to stay away from annuities.

Just an open question on the organization, the funds, the advice and the fees - just your thoughts and experiences.

Why does your work pension get 'disinvested' as you get older? If it does, that sounds as if you are in some sort of lifestyle option, possibly because you've taken no active decisions on which funds you want to be invested in. Do you have a choice of funds in which you can invest, or is it really 'one option only'?

On what grounds were you told to 'stay away from annuities'? That might be perfectly sound advice depending on what you told the adviser, but nobody here can comment usefully without knowing what your aims, attitudes and objectives are. Are you old enough to access your pension ('in my 50s' isn't precise enough)? Do you want to use drawdown and start taking a pension while you are still so young? Do you realise that if you take anything more than the tax free element of the 'pot' you'll trigger the Money Purchase Annual Allowance? Was that explained to you?

Marvel.

Marcon said:

Marvel. said:

The pension will be moving from my work pension where my employer contributes. We'll be keeping 1% in the work pension to allow my employer to keep contributing. The work pension as I get older gets disinvested. 

I was also told to stay away from annuities.

Just an open question on the organization, the funds, the advice and the fees - just your thoughts and experiences.

Why does your work pension get 'disinvested' as you get older? If it does, that sounds as if you are in some sort of lifestyle option, possibly because you've taken no active decisions on which funds you want to be invested in. Do you have a choice of funds in which you can invest, or is it really 'one option only'?

On what grounds were you told to 'stay away from annuities'? That might be perfectly sound advice depending on what you told the adviser, but nobody here can comment usefully without knowing what your aims, attitudes and objectives are. Are you old enough to access your pension ('in my 50s' isn't precise enough)? Do you want to use drawdown and start taking a pension while you are still so young? Do you realise that if you take anything more than the tax free element of the 'pot' you'll trigger the Money Purchase Annual Allowance? Was that explained to you?

I am 56.
The disinvestment was on my work pension graph he showed me. The graph went down as I got older.
I don't choose the funds for my work pension.
Told to stay away from annuities because if I pass early the unused money is not recoverable.
I didn't have any pension moving aims. I was just letting it grow as I don't need to draw on it until I'm 65. My discussion wasn't initially about my pension moving. It was about funding a new buy-to-let which possibly could have used part of my pension I suppose. I have another property I rent - mortgage paid. Thought this could be used somehow - but he mainly focused on just moving my pension and away from property.
I don't know what drawdown means?
I do understand their is a tax free chunk available 25%. I assume you are referring to going over this? I am aware there are tax implication, yes. But I am not sure if you are referring to when I'm 65 and need a monthly pension? The phrase 'Money Purchase Annual Allowance' was not mentioned.
Thanks

(I'm going to bed now. Chat tomorrow).

Marcon

Marvel. said:

Marcon said:

Marvel. said:

The pension will be moving from my work pension where my employer contributes. We'll be keeping 1% in the work pension to allow my employer to keep contributing. The work pension as I get older gets disinvested. 

I was also told to stay away from annuities.

Just an open question on the organization, the funds, the advice and the fees - just your thoughts and experiences.

Why does your work pension get 'disinvested' as you get older? If it does, that sounds as if you are in some sort of lifestyle option, possibly because you've taken no active decisions on which funds you want to be invested in. Do you have a choice of funds in which you can invest, or is it really 'one option only'?

On what grounds were you told to 'stay away from annuities'? That might be perfectly sound advice depending on what you told the adviser, but nobody here can comment usefully without knowing what your aims, attitudes and objectives are. Are you old enough to access your pension ('in my 50s' isn't precise enough)? Do you want to use drawdown and start taking a pension while you are still so young? Do you realise that if you take anything more than the tax free element of the 'pot' you'll trigger the Money Purchase Annual Allowance? Was that explained to you?

I am 56.

The disinvestment was on my work pension graph he showed me. The graph went down as I got older.

I don't choose the funds for my work pension.

Told to stay away from annuities because if I pass early the unused money is not recoverable.

I didn't have any pension moving aims. I was just letting it grow as I don't need to draw on it until I'm 65. My discussion wasn't initially about my pension moving. It was about funding a new buy-to-let which possibly could have used part of my pension I suppose. I have another property I rent - mortgage paid. Thought this could be used somehow - but he mainly focused on just moving my pension and away from property.

I don't know what drawdown means?

I do understand their is a tax free chunk available 25%. I assume you are referring to going over this? I am aware there are tax implication, yes. But I am not sure if you are referring to when I'm 65 and need a monthly pension? The phrase 'Money Purchase Annual Allowance' was not mentioned.
Thanks

(I'm going to bed now. Chat tomorrow).

Why don't you choose the funds for your work pension - is it because there is no choice, or because you're in the vast majority who end up in the default fund? It would be helpful to know which pension scheme you're in.

You might think about getting to grips with some basics before going any further. A free appointment with PensionWise would be no bad idea: https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

They don't give advice but it could increase your understanding, which in turn would enable you to take better-informed decisions. 

gm0

You are likely being led into a financial milking parlour.  Consider carefully before signing any such agreement/contract.  My guidance is to slow down.  Learn a bit more before acting rashly.

Remember - you can probably adjust your investments where they are.  The switch will likely be free in an occupational.  If it is indeed urgent to revisit the mix.  Which may or may not be the case.  Impossible to say absent more information about you and your goals.

And that old scheme more generally will cost whatever it costs to be in it. And for funds to switch to.  Do go and look.

But I would place a small bet that it is likely to cost less than this "generous" (to the adviser) offer.  Employer schemes vary. Some are cheap. Some are more costly. My old one was free - outside of fund charges embedded in unit prices.  Employers and the trusts they setup or products they picked - often long ago.

The pension scheme "feature" of derisking/lifestyling from equities to bonds as you age - whether with an annuity focus (which if you are not buying one is an excessive change to bonds for many) or with a drawdown intent (and switching less % usually).  Is not, of itself, a problem.  Many people want to disconnect their intention to take tax free cash at a fixed date from short term stock market bumps in the road.  And deaccumulation is different from saving up. You should "review" your needs, wants, intention to take or not take TFC upfront or along the way (better for many), and your attitude to risk as you approach taking the pension.  So go you for doing that.   The correct investments follow from that thought process.

You should think about what you intend to do overall.  And how and when this piece will be accessed alongside other income sources and SP.  And what - with that cashflow plan in mind - it should be invested in.  If you aren't taking the money out (very long investment horizon) - you can "Not care" about short term market issues.  But if you are......then you need to consider it more carefully.   There are many online resources and books to help you understand this better.  A "book" / web sites thread comes up regularly here.  Drawdown used for the full retirement has a 40 year investment horizon.  And yet the act of taking income means you need to consider how to run safely to some level.  

We all vary in what we want to achieve and what other pensions we have and pot size vs income so the products available tend more to the "lego construction set" than the fully assembled toy.

With a DC pot of normal type - you can move it for free. (with rare exceptions to this existing with special features of older pensions - guaranteed annuity rates being the main example.  An old school high % gar is a valuable thing which is lost on transfer out.  So protections to prevent ignorant accidents exist.  Very few of us have them now. 

Most DC pensions can be moved with simple admin.  Yourself.  To one of a dozen retail platforms.  In a couple of weeks.  Some of whom will even give you money as cashback to come to them preferentially.  And thus pay the costs of using the product for the first little while.  Years even with a large DC pot making a move.

Names like Fidelity, iWeb, AJ Bell, HargreavesLansdown.  All retail SIPP companies.  There are more like Vanguard (which only has its own funds on it - less choice.  Still a reputable player.  Cost comparison based on intended usage of the various platforms - the way they do offers, trade costs and charges - is complex.  The "best" one for me may not be the right one for you.  Though none of the mainstream ones is necessarily a dreadful choice.  Some of the cheaper ones (fee focused client) have less good digital/web facilities than others.  This is personal preference stuff.

What drawdown should cost you:


Here is first order of magnitude market price for the total cost of having old occupational pension moved into drawdown

Benchmark prices

DIY 0% on the way in.  Transfer cost = your time.  A refund. One off cashback to come - say £500 to offset fees (offers vary). 

Then 0.3% pa for platform and funds.  No advice fee.  As you are on your own.  Platform "guidance" is of little help to be honest.  Some of it is marketing (of their own fund sets).  You in general need to look for better guidance from people who are not selling you anything or trying to cross/upsell as with platforms.

With advice

With formal "suitability" fact find and recommendation (advice) to guide you to a platform and funds (adviser introduced one).
 
1% on the way in (but capped to a maximum pot size). 
0.5% for advice ongoing.  
Your admin to find and contract with advice. 
Then 0.3% pa for platform and funds.  So about 0.8% all in

If you or your adviser are convinced of the merits of star fund managers and active fund management you can add ~0.5% pa to those ongoing fees as extra fund management charges for a different selection of investment choices.

To hit the sub 0.3% number - it takes some time to learn it.  And the interest. 

If you have the time and motivation then it is not rocket science.  And may provide an early retirement activity learning something new to you.  You don't have to do it.  Advice is widely available from IFA (I = independent - a key feature). 

But between costly and very costly depending upon whose clutches you fall into.  (Like buying a car - the cheap one still gets you there.  Some people like a luxury car experience or something exclusive (veblen goods) and are prepared to pay for it.   Decent market price independent advice is more like hiring an electrician or a plumber to do something requiring skills and certification that you choose not to learn to do yourself.   Wealth managers/FAs provide a "white gloves version of the same FCA regulated thing at three times the cost. So they are something else.   Private banks (not for the likes of us) are the veblen tier above the wealth managers.

Luxury goods ?

Take value of DC pot.  Consider a 40 year retirement.   Take the halfway value (assuming deaccumulation from 100% to 0%). Multiply by the duration (40) and the cost of advice 0.5% pa.  That's 10% of the pot.  Add the initial charge. So 11% in my benchmark world.  Higher figures ongoing in wealth manager world.  Could be 15% plus of initial pot value in product charges over its life.  Depending on your pot size that could be several lovely holidays or a car.  

Implication: Financial advice is a luxury good.

The counter argument to the case for DIY or using only one off transactional advice (no ongoing fee) is always that investment performance (which you cannot control) is larger and wilder than not to be considered trifling small variations in fees. Which is true in that you cannot control it.  And it is indeed bigger. Strangely no wealth managers or IFAs make any representations about the performance of the investments they recommend.  It's not part of the deal. It's not what it does.  Sensible risks for you to take yes.  Suitability guarantee.  Speculations that will pay off - nothing to say about that - either in absolute terms, nor relative to other choices you could make.  No promise to beat the low cost whole of market funds.  They get paid rain or shine.  You get paid. Last.

So why not control the thing you can control (costs) and do something mainstream. 

If you need advice.  Find an actual professional independent adviser operating in the world of capped initial charges and a decent benchmark ongoing fee (if you want that). 

Their other family tax advice may be stellar for you.  Or irrelevant.  The IFA and FA can both do that bit.  And will do the same regulated (by FCA) pension suitability advice deliverables.  One will be cheaper than the other

You do you

dunstonh

I have been speaking to a financial advisor from The Open Work Partnership. The conclusion was that he advises that I move my work pension worth hundreds of thousands of pounds to their managed pension 'drawdown' funds called "OMNIS Agility Portfolio 4 or 5".

Tied Sales agent for OMNIS investments.   Omnis agility funds were only launched in June this year and a quick look at the charges puts them at 0.57% p.a.   

There is no track record, and at 0.57%, that is expensive compared to many alternatives.    Sales agents can only sell what they have available to them but no IFA could recommend it and I doubt any of the DIY investors on here would either. 

I'm not that experienced with the different types of advisers.

You have sales agents of their own company who can refer to themselves as FAs.   And you have independent financial advisers (IFAs) who are whole of market and work for you.

Openwork is the current name for what was originally Hambro Life.   It then rebranded as Allied Dunbar (or Allied Crowbar as they were often known as).    Allied Dunbar was merged with Eagle Star and sold to Zurich who used their name (Zurich advice network) and then changed to Openwork.

The disinvestment was on my work pension graph he showed me. The graph went down as I got older.
I don't choose the funds for my work pension.

Apart from a very small number of providers, most will allow you to select alternative funds in your workplace pension.  That should be the first point of call and any alternative benchmarked to that.    I'm not sure how you could successfully benchmark a portfolio launched two months ago with no track record and isn't low cost but then again, sales agents don't have to.

LHW99

The pension will be moving from my work pension where my employer contributes. We'll be keeping 1% in the work pension to allow my employer to keep contributing.

I am not sure that all work (autoenrollment) pensions will allow this. Some will likely need you to opt out completely, move the complete pot, and then opt back in, so you could lose several months of employer contributions.

As said above, you should be able to adjust your work pension yourself, either by choosing a new fund for your contributions to go into, or possibly by just changing your selected retirement date, moving it to 70 or 75. That won't mean you actually have to wait until then, but it would put off / reduce the amount of change to bonds.

You should have / be able to get online access to your pension so that you can see what is available.

Gary1984

As others have said, most pension schemes will let you change your investment choice, without charging you 2% of your entire fund to do so. Get in touch with the pension administrators and ask what fund choices are available.  It will be much cheaper and less hassle.

Marvel.

@Dazed_and_C0nfused @Marcon @gm0 @dunstonh @LHW99 @Gary1984
Thank you all for taking the time to listen to me and share your thoughts. And thanks for sharing some basics.
I thought it was very interesting how new the Agility Portfolio is. Yes, I will slow down, but my personal goal is to maximize my pension/investments for my retirement at 66. I was going to buy another property, but if I can invest in better ways, I'll will.
You asked about my current pension. It's called UK Work Pension Plan from Fidelity Futurewise Target 2035 Fund - Class 6
I do see an option to change investments when I log into the Pension Viewer, but this is far beyond my financial knowledge. I also see an option to create a SIPP. I need to learn more though what a SIPP is.

I will be taking this approach -

- Slow down

- Watching my company webinar on this pension
- Calling PensionWise

- Making an appointment with an independent FA to compare advice

- Creating a list of questions to ask the OWP FA (your responses have helped with this)

Thanks